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Colombia’s Fenoco, coal railway workers agree on pay raise

​The 226 km longrailwayis jointly-owned by Goldman Sachs, Glencore Xstrata Plc and U.S.-based Drummond International, each of whom manage their own rolling stock that together haul about 160,000 tons of coal to seaports.

“Negotiations were difficult but we have reached an agreement,” said Felix Herrera, president of Sintraime, which represents workers in the mining, metallurgy and rail sectors. The union represents about 350 of Fenoco’s 630 direct employees.

The deal between workers and the company was the first to be signed since 2008. Herrera said it involved pay rises of 4.5 percent on average and was valid through 2014.

Colombian labor law provides for up to two 20-day periods of negotiations between workers and employers. The resolution of the dispute at the end of the first round will come as a relief to the government and coal sector at large after a year full of disruption, including strikes and logistics woes.

The government has lost millions of dollars in royalties income from the country’s single most valuable mineral this year after strikes at its No. 1 and No. 2 coal producers Cerrejon and Drummond.

Workers at Drummond’s two mines and port returned to work last Saturday after more than seven weeks of strike action when the government intervened, sending the dispute to be resolved by arbitrators.

“The (Fenoco) agreement ends the (labor strife) in the sector that has left very high social and economic costs,” said Marie Joachim, Fenoco’s vice-president for human resources and communication.

Colombia’s Mines and Energy Minister Amylkar Acosta said on Tuesday the government was maintaining the country’s target for 2013 coal production for now at 94 million tons, hoping producers could make up for some of the strike-related output cuts before the end of the year. (Reuters)